The IRS announced new federal income tax brackets and standard deduction amounts for the 2026 tax year on Thursday. These new figures apply to tax returns that will be filed in 2027.
Increased Income Thresholds
In its official announcement, the agency confirmed that it has raised the income thresholds for each tax bracket. For the 2026 tax year, the highest tax rate, 37%, will now apply to individuals with taxable income exceeding $640,600 and to married couples filing jointly who earn $768,700 or more.
Federal income tax brackets are used to calculate the amount owed on each portion of your “taxable income,” which is determined by subtracting the greater of the standard or itemized deductions from your adjusted gross income.
Boosts to Deductions and Exemptions
The standard deduction will also increase significantly in 2026. For married couples filing jointly, the deduction will rise to $32,200, up from $31,500 in 2025. Single filers will be able to claim **$16,100**, an increase from the $15,750 available in 2025.
In addition to these core changes, the IRS also boosted figures for numerous other tax provisions. These include adjustments to the long-term capital gains brackets, an increase in the estate and gift tax exemption, and expanded eligibility criteria for the earned income tax credit, among other changes. These announcements regarding future tax relief came just one day after the IRS stated it would furlough nearly half its workforce due to the ongoing government shutdown.
The Tax Policy Irony
The timing of the IRS announcing future inflation-adjusted tax relief while simultaneously furloughing staff due to a budget dispute presents a stark irony. While these bracket adjustments are an uncontroversial, standard measure to prevent “bracket creep” from high inflation, the agency is visibly struggling to perform its core functions and staff its operations in the present. This situation highlights a dangerous governmental dichotomy where politically safe long-term policy adjustments proceed normally, even as the essential services of the agency are actively sabotaged by short-term political gridlock.
Featured image credit: Mikhail Nilov via Pexels
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